This came after the reports that AA will file tomorrow.
http://biz.yahoo.com/ap/030424/american_airlines_12.html
Financial News
Enter symbol(s) BasicDayWatchPerformanceReal-time MktDetailedChartResearchOptionsOrder Book Symbol Lookup
Associated Press
American Air CEO Quits; Unions Reach Deal
Thursday April 24, 8:12 pm ET
By David Koenig, AP Business Writer
American Airlines CEO Resigns; Unions Reach Concessions Deal in effort to Stave Off Bankruptcy
FORT WORTH, Texas (AP) -- The chairman and chief executive of American Airlines resigned Thursday as labor leaders and negotiators for the carrier agreed to a sweetened package of cost cuts in an effort to keep the company out of bankruptcy.
ADVERTISEMENT
Gerard Arpey, the company''s president, will replace Donald J. Carty as CEO, while board member Edward A. Brennan will take over as chairman.
Carty''s resignation came after flight attendants reportedly balked at the new deal, which improves potential bonuses for employees and shortens the length of concessions by one year to five years. The deal would also provide incentives for additional cash compensation, said John Darrah, president of the pilots'' union.
The boards of the pilots and transport workers unions approved the new concessions package, but flight attendants also would have to OK it, as would the company''s board of directors.
A $1.8 billion cost-cutting package that was agreed upon last week unraveled after employees learned of previously undisclosed executive perks, including bankruptcy-proof pensions and huge bonuses.
Carty apologized for not telling workers sooner about the executive benefits. The company canceled the bonuses but not the $41 million in pension funding for 45 executives, which would be paid even in bankruptcy.
Arpey, who will remain as president, said he would work to restore the confidence of all employees in their great company.
It was not clear, however, whether the combination of Carty''s resignation and the sweetened labor deal would be enough to prevent a bankruptcy filing by the world''s largest carrier. AMR board members, who met all day Thursday, declined to comment, referring questions to the company.
Adding to the pressure on Carty was Wednesday''s first-quarter financial report from AMR, which posted a worse-than-expected $1.04 billion loss.
Airlines have been hit hard by a downturn in travel caused by the weak economy, the 2001 terrorist attacks, fear of new terrorism around the Iraq war, and the SARS outbreak. Major carriers like American have also found it difficult to raise prices because of competition from low-fare carriers on many of their routes.
AMR stock rose Thursday, as investors held out hope the airline can restore labor peace and avoid bankruptcy. In trading on the New York Stock Exchange, AMR shares rose 24 cents, 6.3 percent, to $4.04. They gained another 31 cents in extended trading.